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Article
Publication date: 4 August 2020

Maria Kontesa, Andreas Lako and Wendy Wendy

The purpose of this study is to examine the relationship between board capital and firm earnings quality with different controlling shareholders for a sample of 252 listed firms…

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Abstract

Purpose

The purpose of this study is to examine the relationship between board capital and firm earnings quality with different controlling shareholders for a sample of 252 listed firms in Indonesia over the period 2011–2017.

Design/methodology/approach

This study uses a two-step dynamic generalized method of moments panel regression to estimate the board capital effect on earnings quality. The board capital measure is constructed from educational capital, networking capital and experience capital. Meanwhile, discretionary accrual is used as the proxy for earnings quality. All financial data is from the annual report. Board capital data is a combination of an annual report, RelSci data, Linkedin searching and Bloomberg data.

Findings

The findings of this study report that board capital has a significant effect on earnings quality. Higher board capital may result in better earnings quality. In further investigation, this study finds that firms with higher education backgrounds tend to have better earnings quality. Meanwhile, firms with higher experienced board members tend to have bad earnings quality. Additionally, networking capital does not have any impact on earnings quality. The findings of this study also document a strong size effect of controlling shareholders in moderating the relationship between board capital and earnings quality.

Research limitations/implications

This study contributes to upper-echelon, institutional, positive accounting and agency theory. It implies that agency cost plays an important role in that relationship. In a more deep analysis, this study records different board capital effects on earnings quality across controlling shareholders.

Practical implications

Shareholders should elect board directors following their competencies and should note that not all competencies will give a quality earning report. The educational background of board members will enhance earnings quality, but the experience of a board member will reduce the earnings quality. Further, the relationship between board capital and earnings quality is significantly moderated by controlling shareholders, implying that different controlling shareholders need different board capital.

Originality/value

This study examines board capital effects on earnings quality with different controlling shareholders using four major theories. The board capital measure is tedious and detailed allowing to capture the comprehensive human capital.

Details

Accounting Research Journal, vol. 33 no. 4/5
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 14 January 2025

Rayenda Khresna Brahmana and Maria Kontesa

This research aims to examine how financial literacy moderates the mediation of attitude toward virtual influencers’ non-fungible tokens (NFTs) or ATB on the relationship between…

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Abstract

Purpose

This research aims to examine how financial literacy moderates the mediation of attitude toward virtual influencers’ non-fungible tokens (NFTs) or ATB on the relationship between purchase intention and self-congruity, which includes symbolic representation, self-image congruence and emotional value. Initially, we investigated the mediation effect of ATB on the relationship between self-congruity and purchase intention. Subsequently, we analyze how financial literacy moderates this mediation process.

Design/methodology/approach

The study employed a sample of 383 virtual influencers’ fans and applied a partial least square structural equation model (PLS-SEM) along with robustness tests to test the research hypothesis. The analysis is based on the moderated mediation framework.

Findings

The findings are intriguing for several reasons. First, it reveals that only self-image congruence positively affects purchase intention, contrary to existing self-congruity theory literature. The relationship between self-image congruence and purchase intention is a direct relationship with no mediation effect of ATB. Second, ATB fails to mediate the self-congruity effect on purchase intention. Third, financial literacy has a negative relationship with purchase intention, indicating that fans of virtual influencers with higher financial literacy are less likely to purchase virtual influencers’ NFTs due to more critical investment evaluations. We also argue that financial literacy discards the consumption behavior effect from self-congruity variables on purchase intention.

Research limitations/implications

The study contributes to the literature by emphasizing the significance of financial literacy on purchase intention under the self-congruity framework. It also surmises that self-image congruence does matter for the purchase intention of a virtual influencer’s NFT. However, further research could validate findings by studying broader NFT investors, incorporating fandom and impulse buying variables and examining actual NFT purchases against planned behavior.

Practical implications

This research is crucial for virtual influencers’ NFT creators, marketers and fans by providing insights for evaluating virtual influencers’ creators’ decision to pursue NFT markets. The findings reveal that the creators of virtual influencers should reconsider pursuing the NFT market, as self-congruity may not be a driving factor. Notably, our findings imply that a virtual influencer’s NFT is significantly different from a virtual influencer's merchandising business.

Originality/value

The originality of this study lies in extending the self-congruity within the NFT context, investigating how financial literacy moderates the mediation of ATB on the self-congruity-purchase intention relationship. It challenges self-congruity theory by showing that despite fans feeling aligned with virtual influencers, high financial literacy reduces the congruence.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

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Article
Publication date: 24 December 2024

Rayenda Khresna Brahmana, Maria Kontesa and Doddy Setiawan

This study aims to investigate the impact of product market competition on the relationship between firm digital transformation and international diversification. It aims to…

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Abstract

Purpose

This study aims to investigate the impact of product market competition on the relationship between firm digital transformation and international diversification. It aims to uncover how competition moderates this relationship and to reveal the nonlinear dynamics between digital transformation and international diversification in strategic decision-making processes.

Design/methodology/approach

Using a panel logistic regression analysis, this study examines data from 235 Malaysian nonfinancial listed companies from 2012 to 2019. The analysis focuses on the manufacturing and technology industries due to the availability of digital transformation data, leading to a data set of 1,180 year-firm observations.

Findings

The results reveal a nonlinear relationship between digital transformation and international diversification, intensified by product market competition. Initially, digital transformation positively affects international diversification, but this effect turns negative as competition increases. Robustness checks validate these findings, indicating that competition’s impact varies with the level of digital transformation.

Research limitations/implications

This study’s findings are based on text analysis as a proxy for digital transformation, which may not fully capture organizational changes. Future research could use reported transformation costs or mandatory disclosures. In addition, this study focuses solely on international diversification, excluding other forms of diversification and financial constraints.

Practical implications

Policymakers should recognize that high product market competition can negate the benefits of digital transformation on internationalization. They need to balance promoting digital transformation with addressing competitive challenges. Managers should analyze the competitive landscape before pursuing international expansion, as high competition can diminish the advantages of digital transformation.

Originality/value

This research enriches agency and resource-based view theories by revealing the complex dynamics between digital transformation, competition and international diversification. It introduces a parabolic relationship between competition and diversification, challenging traditional assumptions and providing a comprehensive framework for understanding strategic decisions in competitive environments.

Details

Critical Perspectives on International Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 17 April 2024

Maria Kontesa, Rayenda Khresna Brahmana and Hui Wei You

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal…

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Abstract

Purpose

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal value, especially when the auditing process is not mandatory. This study aims to examine how national culture-religiosity affects that decision. The authors further examine how foreign-owned MNCs might behave differently from local MNCs, although the host country’s cultural-religiosity value might influence that decision.

Design/methodology/approach

This study obtains the data from three sources: Hofstede Framework, Pew Research Center and World Bank Enterprise Survey in cross-sectional mode. The final sample consists of 8,590 SMNCs from 45 countries as the observations. This study uses robust regression analysis to test the effects of culture, religiosity and controlling shareholders on the audited financial statements decision.

Findings

The regression results support the hypothesis, whereas cultural-religiosity values are associated with the audited financial report. The findings confirm stakeholder theory and institutional theory.

Originality/value

This study fills a gap in the literature by providing empirical evidence on the cultural and religiosity effects on the accounting decision of SMNCs. The results can be used as the foundation for future research related to MNCs’ managerial behavior toward accounting policies, especially with the psychosocial factors.

Details

Pacific Accounting Review, vol. 36 no. 2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 26 July 2023

Rayenda Khresna Brahmana and Maria Kontesa

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study…

361

Abstract

Purpose

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study tests the impact of the proportion reported sharia-compliant debt financing in the balance sheet on the risk of price crash of a firm.

Design/methodology/approach

Using the data from 2,752 firm-year observations of 344 Malaysian non-financial listed companies from 2012 to 2019, this article used a robust panel data estimation technique for statistical inferences. This study also employs panel GMM and quantile least squares as the robustness check.

Findings

This study established a negative relationship between sharia-compliant debt financing and stock price crash risk. The robustness checks with different estimation techniques confirm the results. It implies that firms with a more significant proportion of Sharia-compliant financing tend to have lower future stock price crash risk.

Practical implications

Consistent with the Islamic finance literature, the present study contributes to the existing literature on Islamic capital markets from the perspective of stock price crash risk because it is vital for risk management and investment decision-making as a measure of tail risk for stocks. The findings of this research will assist investors in developing portfolio strategies that incorporate firms with higher levels of sharia-compliant debt financing in their balance sheets. Additionally, the results of this study suggest that policymakers and regulatory bodies should consider revising their monitoring approaches for publicly listed firms.

Originality/value

This study is interesting and unique, as it is a pioneer in testing the impact of sharia-compliant debt financing on reducing stock price crash risk.

Details

Managerial Finance, vol. 50 no. 3
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 13 August 2020

Rayenda Khresna Brahmana, Hui Wei You and Maria Kontesa

This research aims to examine the moderating role of CEO power on the relationship between retrenchment strategy and firm performance by framing the relationship under an agency…

889

Abstract

Purpose

This research aims to examine the moderating role of CEO power on the relationship between retrenchment strategy and firm performance by framing the relationship under an agency theory, and power circulation theory.

Design/methodology/approach

This study focuses on a sample of 319 non-financial public listed companies in Malaysia from the year 2011–2016 and estimates the model under two-step GMM panel regression to eliminate the endogeneity issue.

Findings

The results show that the retrenchment strategy increased firm performance. Meanwhile, greater CEO power changes that retrenchment effect into increased performance. This study also indicates the CEO power strengthens the relationship between firm performance and retrenchment. However, CEO power does not have any effect on the performance of low retrenchment, and the performance of big firm size.

Research limitations/implications

The findings show that the higher CEO power cause higher firm performance and higher retrenchment. This research suggests that CEO power can make retrenchment strategy works and the decision made can affect the firm performance significantly.

Originality/value

This study examines the effect of CEO power on the performance of retrenchment strategy implementation by contesting agency theory, power circulation theory, and resource-based view theory within the emerging country context.

Details

Journal of Strategy and Management, vol. 14 no. 1
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 28 October 2024

Maria Elisabete Neves, Diana Caniaux, Maria do Castelo Gouveia and Arnaldo Coelho

This work aims to analyze the factors that influence the performance and efficiency of Portuguese companies, namely the influence of social and environmental features.

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Abstract

Purpose

This work aims to analyze the factors that influence the performance and efficiency of Portuguese companies, namely the influence of social and environmental features.

Design/methodology/approach

To achieve our aim, we have used the Portuguese benchmark index, the Portuguese stock index – PSI, during the period from 2016 to 2020. To test the hypothesis panel data methodology was used, specifically, the GMM system originally proposed by Arellano and Bond (1991) and the Value-Based DEA developed by Gouveia et al. (2008).

Findings

The results of the GMM model show that social performance has a negative relationship with the company’s performance, from the perspective of different stakeholders, reinforcing that the cost-benefit trade-off of social spending is not yet understood as advantageous for the company’s performance. On the other hand, environmental performance, for external stakeholders, positively influences the company’s performance, perhaps due to pressure from society and the tradition of disclosing environmental matters. The value-based DEA results reinforce that from the perspective of the external stakeholder, non-efficient companies must increase their environmental performance to become efficient, highlighting the role of environmental performance in explaining efficiency. It is unanimous that social performance is still not seen as a lever of efficiency.

Originality/value

This is the first work to use a hybrid methodology to understand the performance determinants of a small banking-oriented country, emphasizing environmental and social aspects.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

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